Ticketing Symposium: Ticketmaster CEO Discusses Yankees Deal, Analytics Biz
Ticketmaster CEO Nathan Hubbard was the featured interview on the opening day of the '13 Ticketing Symposium, and began by discussing his company's deal with the Yankees. Hubbard said, "Part of the issue is arbitrage, and at the end of the day, that's what is driving a lot of it. But it wasn't just that the Yankees wanted to get in there and make money. It was that the Yankees were being disintermediated from their highest-valued fans, their most passionate fans. I think they wanted to reclaim that relationship, and have that direct, one-to-one, brand-to-fan relationship. At the core, that's what it was about." He added, "In the secondary market right now, there is some market manipulation happening at the low end. Some providers out there that don't believe in price floors, but they definitely believe in fee floors. So, they are incentivizing high-volume, low-dollar sales, because they're agnostic as to whether a ticket is sold for a buck, or 10-15 bucks. ... I think there's some concern by content, that the market is being manipulated to force tickets being sold actually below what they're worth." Hubbard said of the company's current overall approach, "We try to solve three core industry problems: inefficient pricing, the disintermediation of the venue or the team content from the end fan, and the fan experience."
EVOLUTION OF DATA AND ANALYTICS: Hubbard spoke at length about Ticketmaster's growing business of live analytics and data processing, and compiling consumer information for specific events as opposed to simply driving the event's sales. He said, "It's about how do you fingerprint each individual person who comes through that venue, so that you can get more of them to come, and you can get them to buy more than 2.7 tickets on average." He added, "Our relationship with the NFL really created the underpinnings of this entire initiative. Because so many of those teams do not need help selling individual game tickets. They do need help getting to know every single fan who's walking through their venue on a given night." Hubbard said the live analytics arm of Ticketmaster's overall business is growing rapidly. "The measure is that for the first time in the history of our business -- the 38-year history of Ticketmaster -- their clients are actually writing us a check instead of the other way around," he said. "And then a lot of it, we're just giving away for free, because we should and because it makes the product better. That business is doing very well for us. We've got hundreds of clients today, creating millions of dollars in value in terms of how people allocate their marketing spend, grow their revenue, determine their cap-ex budgets, all the way on down."
LEARNING FROM OUR PEERS: Hubbard said the sports industry should take a cue from Kid Rock and others in the concert business in creating valuable fan experiences, thus making lifelong fans. He noted that Kid Rock is giving away two rows of the best seats at his concerts to fans who purchased seats in the lawn or the upper deck. Hubbard said, "He's doing some really creative things that are focused on building lifetime value of the fan. And as we all talk about dynamic pricing, and getting that price right, in the back of our heads, we need to think about, not how do we extract the most value tonight, but how do we extract the most value over the next month, over the next 25 years."
CONSOLIDATION EFFORTS: Hubbard said that among the current challenges for Ticketmaster is developing a service to combine its clients' primary and secondary ticketing services. He said, "If you Google your brand's tickets right now, it's a complete disaster. We are in a unique position to help solve that problem. I think a lot of the secondary market is built to cater to the broker community. That's not necessarily a bad thing. There's some brokers who are totally legitimate distributors of inventory. There's also some that are totally illegitimate arbitragers who are cheating to get those tickets."
LET'S GET CONNECTED: Hubbard said you can count Ticketmaster among the companies that stand to benefit from increased wi-fi capabilities in sports venues. He said teams, sponsors, vendors, consumers and others will all see massive gains once all stadiums are finally capable of offering connectivity to everyone in the arena. Hubbard: "They've got a boiling pot with a lid on it, and the lid is just rattling and none of the steam is getting out. There is chatter happening about how amazing the experience inside the walls of that venue is happening, that's literally not being allowed out into the public space. It's the cheapest marketing there is. Not to mention that there are platforms ready to plug into those networks on payment around marketing, around loyalty, around you-name-it, that just require that infrastructure. The only barrier left is venues making the incredibly important investment in the networks." Hubbard noted that mobile browsing accounts for 35% of Ticketmaster's online traffic, and that the company will sell "more than twice as many tickets via mobile this year" than it did in '12.
* On teams implementing social media sites into their ticket sales process: "I don't know that users of social today are aggressively looking at commerce. They're separating commerce from social in certain ways. It's an amazing awareness platform to drive commerce, but I'm not seeing transaction after transaction happen on Facebook."
* Hubbard's impression of the 49ers' new stadium project: "The way that they're thinking about that facility, and the technology behind, is going to move us a step ahead as an industry."
* On more transparent fee disclosures: "The fan, it turns out, low and behold, rewards you when you reduce the friction to buying. So when you tell him up front how much of his hard-earned money we're asking him to pay, he's more likely to buy. When you drop a bomb on him at checkout, he gets angry, and sometimes abandons."